(PatriotWise.com) — On Friday, the Art Institutes, a system of for-profit art colleges, announced it was closing its eight remaining US campuses by the end of September, leaving hundreds of students and faculty stunned by the news, the New York Times reported.
The Art Institutes, which was forced to pay a $95 million fraud settlement in 2015 and had to close nearly 20 locations in 2018 after losing accreditation, have suffered from declining enrollment since the pandemic.
On Friday, students from the remaining eight schools received an email notifying them that the schools were closing and that “the Art Institutes do not anticipate any further communication.”
According to the US Department of Education, 1,700 students from locations in Atlanta, Austin, Dallas, Houston, Miami, San Antonio, Tampa, and Virginia Beach are affected by the closures.
Debrah Obalil, the executive director of the non-profit consortium the Association of Independent Colleges of Art and Design, told the New York Times that traditional arts education schools are also experiencing declining enrollment, with some like the San Francisco Art Institute declaring bankruptcy. Other schools, like Nashville’s Watkins College of Art, are merging with other institutions to remain viable.
The Art Institutes first began in 1970 after a Pennsylvania company called Education Management Corporation acquired the Art Institute of Pittsburgh, which was first founded in 1921.
By 2010, the company had over twenty locations and was making $2.5 billion a year, with $1.8 billion coming from student loans and Education Department grants.
In 2015, Education Management Corporation settled with the Department of Justice over claims that included consumer fraud and illegal recruiting.
After the schools were acquired by Dream Center Education Holdings in 2017, the network was forced to settle a class-action lawsuit that accused four of the Art Institutes schools of misleading students into thinking that the schools were accredited.
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